I am grateful to my noble friend for raising this important issue.
The Government published impact assessments for each measure in the Bill at its introduction. As is usual practice, we will publish updated impact assessments when the Bill is enacted, setting out the impacts of any material amendments to the Bill. I assure my noble friend that for measures where regulations that are subject to consultation are required, we will publish impact assessments when those regulations are brought forward. This must be the most beneficial time to revisit the impacts, when further policy detail is set out and we are able to apply that element of further insight to our estimates of costs and benefits. I suggest that adding another impact assessment between Royal Assent and the laying of the regulations would not provide any further transparency.
Turning to dashboards specifically, the Government are well aware of the additional costs necessary to support the set-up and maintenance of pensions dashboards. As my noble friend knows, when we published an impact assessment that accompanied the Bill, we set out initial estimates of the possible costs. However, we should recognise that many schemes already provide similar levels of information directly to their consumer through annual benefit statements or digital platforms, so not all schemes will necessarily incur significant additional costs.
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The impact assessment showed illustrative estimates suggesting that the total cost to business over 10 years could be within the range of £245 million to £1.48 billion,
not including micro-schemes. The assessment recognised that it was not possible to provide more meaningful costs until the development of the system was more advanced; nor did it seek to estimate the potential significant benefits to consumers as a result of connecting to all of their pension savings or to business from more streamlined administration.
The noble Lord, Lord Vaux, asked whether we had any information from the open banking exercise. I will make suitable inquiries about that. I do not have the information to hand, but if I can get it to him, I will certainly do so.
The new impact assessment, which will be produced alongside the regulations, is the most appropriate place to set out these more detailed estimates of costs and benefits, since it will be able to reflect the detail of the proposed dashboard infrastructure as well as the information needed. However, I assure my noble friend that the number of qualifying dashboard services will have no impact on the cost to schemes; we believe that allowing multiple dashboards will maximise the potential benefits to consumers. Costs might arise from schemes ensuring that data is accurate, but they should already be doing this as part of data protection and disclosure legislation. Having accurate data is an essential feature of a healthy pensions landscape. As such pension schemes should routinely commit to making their data more accurate, my colleague in the other place, the Minister for Pensions, has repeatedly called for schemes to clean their data now instead of waiting for dashboard implementation.
I appreciate the importance of making it simple for schemes to connect to the service. That is why the Government have recommended that there be only one pension finder service. Smaller schemes, which may have more difficulty updating their systems, can consider the use of an integrated service provider, which may be able to facilitate connections and limit the changes required directly to the scheme’s IT infrastructure.
My noble friend emphasised her concerns about burdens falling on the smallest and poorest schemes. The industry delivery group commissioned PricewaterhouseCoopers to carry out further research with pension schemes. This will help to understand better what problems they might face in connecting to the dashboard infrastructure and the costs of such a change. Developing this research and understanding will also enable us to start to consider in what order schemes might move into the scope of the pensions dashboard and the issues and risks to be faced.
The Government recognise that there will be one-off implementation and ongoing maintenance costs for pension schemes and other developers of dashboards. As I have said, our impact assessment provides potential indicative implementation and ongoing costs over a 10-year window. However, by having a single supporting dashboard infrastructure that schemes must connect to, we have ensured that costs to industry are lower compared to if they had to connect to all dashboards individually. In addition, as I said, we recommended that there should be a single pension finder service in the initial phases of dashboards. That will help to minimise costs compared to having multiple pension
finder services. Practical considerations of small schemes may also be taken into account as we develop our approach to staged onboarding.
The noble Baroness, Lady Drake, made the very sensible point that schemes should have accurate data anyway. I agree with her on that. As we stated in our consultation response, many respondents in industry saw the benefits to consumers as outweighing the potential costs to industry. The cost of data cleansing has not been taken into account in the impact assessment precisely because it should be done anyway.
My noble friend Lady Neville-Rolfe referred to the TCFD climate change amendment and asked whether it could increase the cost of the dashboard. We do not anticipate significant burdens on pension schemes because we will legislate for only the largest schemes in the first instance. The largest schemes should have governance and risk-management processes in place and have in-house resources that will allow them to comply readily. The climate change amendment will not have any business impact on the other measures in the Bill. However, I emphasise again that we will test our assessment of business burdens extensively when we consult on the policy detail following the passage of the Bill.
My noble friend also asked how we would stop pension schemes passing on to consumers the cost of meeting their dashboard requirements. Working with the industry delivery group, the regulators and others, we will continue to assess the potential impact of legislation relating to dashboards. As I said earlier, the implementation of dashboards is seen by many in the industry as a cost to be incurred for the long-term benefit of members. The charge cap limits the amount that auto-enrolment schemes can charge members invested in default schemes; that places an upper limit on the costs that could be passed on to members of pension schemes.
We recognise the scale of the challenge presented by providing simple pension information via a dashboard. We want to start to bring forward the consumer benefits as soon as possible by remaining focused on making an initial service offer deliverable without overcomplicating requirements, which would also drive up costs. The Government are committed to working with the industry delivery group to shape dashboard infrastructure. We are also committed to being transparent about the costs and benefits that will accrue as the result of the range of measures in the Bill.
I hope that this commitment to further assessments at the most appropriate time provides at least some reassurance to my noble friend and that she will feel able to withdraw her amendment.